- British Pound started a short-term recovery against the US dollar and traded above the 1.3950 level.
- There is a bullish trend line formed on the hourly chart of the GBPUSD pair, which may be seen a buy zone.
- UK Manufacturing Purchasing Managers Index (PMI) was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.
- UK Manufacturing moved down from 52.9 to 50.8 in February 2016, less than the forecast of 52.2.
The British Pound after trading towards 1.3850 against the US dollar found support and started to move higher. There is now a bullish trend line formed on the hourly chart of the GBPUSD pair, which is acting as a support and can be seen as a buy area.
The pair is above the 100 and 50 simple moving average, which is a positive sign, and may push it higher. On the upside, the next resistance area can be around the 1.4000-20 where buyers may struggle.
On the downside, we need to keep a close eye on the trend line support area as a break below it may call for losses in GBPUSD.
UK Manufacturing PMI
Earlier today, the UK Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The forecast was lined up for a minor decline from 52.9 to 52.2 in Feb 2016. However, the result was disappointing, as there was decline to 50.8.
The report highlighted that “February saw the rate of expansion in the UK manufacturing sector slow back towards the stagnation mark. Output growth eased sharply, as levels of incoming new business showed little-movement on one month earlier. The slowdown was also reflected in the labour market, with job losses registered for the second straight month”.
In short, the GBPUSD has no positives, but looking at the technicals, there is a possibility of it gaining traction.